The slump in property market is a result of several challenging factors and likely to suffer further slowdown. As a result, the government has issued residential property stimulus measures, as explained by KResearch below:

The package includes the Finance Ministry's residential property stimulus measure which targets the customer group with real demand. They are first-time buyers planning to buy a house with reasonable price. Additionally, there is a measure to ease the spending burden of low-income and middle-income earners who want to purchase a residential property worth up to THB1 million (in line with the 1-million-unit housing scheme). This group of homebuyers represents a large customer base. The stimulus package has different objective from that of the loan-to-value (LTV) requirement issued by the Bank of Thailand to ensure mortgage loan approvals are in consistence with borrowers' debt service ability (e.g., purchasing for speculation/investment) and to govern loans approved for expensive housing units to oversee the quality of housing loans and financial stability of the system.

The property stimulus measures consist of 1) the tax measure for first-time home buyers with real demand, who will be entitled to tax deductions of up to THB200,000 for residential property worth up to THB5 million from April 29-December 31, 2019. And, 2) the government agrees to ease the spending burden of home buyers by cutting housing transfer fee for residential property worth up to THB1 million from 2.0 percent to 0.01 percent of appraised value, and cutting mortgage registration fees from 1.0 percent to 0.01 percent of the mortgage amount. This group of buyers is mostly low-income and middle-income earners who have limited budget for purchasing a residential property unit and they are more vulnerable to economic conditions than others. The measure should somewhat ease the buyers' expenditure burden related to property transaction.

KResearch views that the beneficiaries of these measures are customers who are financially ready and making decision to purchase a home, and customers who expect to transfer property ownership during this period. Meanwhile, real estate developers with housing units worth no more than THB5 million in the backlog or scheduled to finish this year, will benefit from the scheme as well.

​During the remainder of 2019, the residential property market will continue to encounter several challenges such as sluggish economic condition which affects the consumer confidence and decision of homebuyers, uneven recovery of household purchasing power, high volume of accumulated unsold housing units in the market and the LTV measures to govern housing loans. KResearch views that residential property investment and buying activities in Bangkok and its vicinity will proceed with cautions. In 2019, around 110,000-115,000 units of residential property units are expected to be available on the market, shrinking by 5.2-9.5 percent from 2018, while the number of residential property ownership transfer in Bangkok and its vicinity is likely to contract around 10.0-13.9 percent or totaling around 169,300-177,000 units.

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